Struggling municipality must pay up

2019-10-30 06:00
Madala NtombelaPhoto: Supplied

Madala NtombelaPhoto: Supplied

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The struggling Maluti-a-Phofung Municipality (MAP) in the Eastern Free State was ordered by the Bloemfontein High Court to pay R33,8 million to the company, Rural Maintenance.

Judgement was rendered on Monday, 21 October.

It was found that the municipality wrongfully enriched itself with more than R200 million from a contract signed in 2013 with Rural to operate its electricity distribution network for 25 years.

After seven months, in 2014, Rural terminated the contract, citing that after the election of the new mayor, Sarah Moleleki, the municipality made it impossible to proceed with the deal.

The contract was declared illegal and void in the Bloemfontein High Court in 2017.

In his recent verdict, Judge Fouché Jordaan said the amount of R166 950 213 was received by Rural as an income for operating the network. It must be deducted from the money with which the municipality was unlawfully enriched.

That leaves the municipality with R33,8 million to pay.

From the judgement it appears as if the shaky power distribution network was about to collapse when Madala Ntombela, the then municipal manager, and Chris Bosch, chief ope­rating executive of Rural Maintenance, signed the contract in Ntombela’s house.

Ntombela used to be the mayor of the Mafube Municipality in Frankfort. He and Moleleki both resigned from the Maluti-a-Phofung Municipality in September 2013.

Rural has spent more than R167 million in bulk purchases of electricity, repairs, maintenance and material for the network and for the technology and software which costed R13,4 million.

Rural Maintenance paid the overdue electricity bill to Eskom and paid the electricity supplier a total of R120 million in the seven months for the monthly bills.

When the contract was concluded, MAP owed Eskom more than R100 million.

This debt is now over R3 billion.

An expert testified that he was impressed by what Rural has accomplished in such a short time in MAP’s service area, which is Kestell, Harrismith and Qwaqwa.

Rural Maintenance’s initial claim was for insurance of about R8,7 billion which it would have earned from the 25 year contract.

Jordaan also ordered MAP to pay most of Rural Maintenance’s legal costs.


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